The quality of Australian biotechnology is acknowledged worldwide as being world class. But the path to riches on the stock exchange is fraught with difficulty. Here are four potential life-science stars on the ASX: all of which, however, come laden with caveats. The fact remains that biotech is a risky business, where dud trial results or patent warfare can quickly derail what seemed highly promising situations. In the first of a series, the Switzer Super Report brings you a peek into the fascinating world of Australian biotech.
Benitec Biopharma (BLT, 45 cents, market cap $22.8 million)
It seems to have spent more time in the patent courts in the last 10 years than in the laboratory, but Sydney-based Benitec Biopharma has a couple of trials ready to start that could go a long way toward establishing the effect of its ‘gene silencing’ platform technology (so-called because it may be applicable across a variety of diseases), which was developed in the late 1990s at the Commonwealth Scientific & Industrial Research Organisation (CSIRO).
The technology – for which Benitec holds more than 40 global patents – is capable of ‘turning off’ disease carrying or unwanted genes. The platform is called ‘DNA-directed RNA interference,’ or ddRNAi: it works by introducing a small DNA sequence directly into a cellʼs nucleus, where it silences the unwanted or disease-causing genes.
This has huge potential both in human therapeutics and agriculture, although it is the former that most excites investors – who have had to be extremely patient, after Benitec was effectively paralysed between 2004 and 2010 by a long-running patent battle in the US.
The most exciting thing about Benitec’s gene therapy approach is that it involves a single-dose injection treatment, which is much simpler than multiple-dose therapies. Benitec says the technology “has the potential to turn off any gene associated with any disease.”
The lead drug candidate is the Hepatitis C therapy TT-034, which is shortly to enter a Phase 1/2a trial, with trial data expected to be available in 2015. The second candidate is the company’s chemotherapy-resistant lung cancer treatment Tribetarna, which is scheduled to enter human trials in late 2014. Benitec has also licensed its technology to other companies working on conditions such as Huntington’s disease and HIV/AIDS.
Benitec has about US$6 million in cash, which is sufficient for the Phase 1/2a trial and for another six to 12 months for the Phase 2b trial. The company will need additional funding for further trials, but is likely to sign partnership deals on the back of trial progress.
Prana Biotechnology (PBT, 55 cents, market cap $202.6 million)
Prana Biotechnology is a world leader in research into the role of biological metals in human disease. The company’s technology is based on the relationship of certain metals, present in all cells, with certain proteins. The backbone of Prana’s technology is the work done in the 1990s by Professor Colin Masters at the University of Melbourne and the Mental Health Research Institute: Professor Masters isolated and described the amyloid protein that lies at the centre of the neuro-degenerative condition, Alzheimer’s Disease.
A large body of evidence suggests that many age-related conditions result from pathological interactions between certain metals and proteins: the focus of Prana’s technology is on preventing these interactions, the protein aggregation and corruption they can cause, and the free radicals and oxidative stress they can generate.
From this research, the company has developed a proprietary ‘library’ of chemical compounds that it hopes to develop into therapeutics in a range of disease applications, focusing mainly on neurological diseases, particularly Alzheimer’s, Parkinson’s and Huntington’s diseases.
The company’s lead clinical drug candidate, PBT2, is designed firstly to target Alzheimer’s Disease. In October, a study found PBT2 could restore memory and learning in old mice, by promoting the birth of new nerve cells in the hippocampus, a part of the brain particularly affected by Alzheimer’s disease; as well as clear amyloid from the brain.
Next up for Prana is to report early in 2014 on a recently completed Phase 2 clinical trial testing its PBT2 drug in early-to-mid stage Huntington’s disease patients, and to progress another trial testing the compound in Alzheimer’s disease patients. The results from this trial, known as IMAGINE, are expected to be released in March 2014.
Bionomics Limited (BNO, 87 cents, market cap $349.5 million)
Adelaide-based Bionomics discovers and develops innovative therapeutics for cancer and diseases of the central nervous system. It uses four proprietary technology platforms: Angene, a drug discovery platform, which incorporates a variety of genomics tools to identify and validate novel angiogenesis targets (involved in the formation of new blood vessels); MultiCore, a chemistry platform for the discovery of small-molecule drugs; ionX, a set of novel technologies for the identification of drugs targeting ion channels for diseases of the central nervous system; and CSC Rx Discovery, which identifies antibody and small-molecule therapeutics that inhibit the growth of cancer stem cells.
In cancer, Bionomics has two lead projects: its “vascular disrupting agent,” BNC105, which has demonstrated clinical benefit in a Phase 1 renal cancer trial, and is progressing into a Phase 2 renal cancer trial and a Phase 1 ovarian cancer trial; and BNC101, its cancer stem cell-targeting antibody for solid tumours.
BNC101 has demonstrated functional activity against cancer stem cells from primary colorectal cancer patient samples. In pre-clinical studies, BNC101 has significantly reduced CSC frequency in vivo and prevents tumour re-growth in long-term studies. BNC101 has been advanced into investigational new drug (IND) application stage and Bionomics is preparing it for clinical trials.
In the central nervous system area, Bionomics’ BNC210 compound has also progressed to IND application stage: subsequently the compound – now known as IW-2143 – entered a US Phase I clinical trial with the company’s development partner, Boston-based Ironwood. Pharmaceuticals. Also, Bionomics’ BNC375 has been identified as a drug candidate for cognitive impairment in Alzheimer’s disease, Parkinson’s disease and other conditions where memory loss occurs.
Both the BNC105 and IW-2143 compounds offer “blockbuster” potential, if successfully developed.
Further out in Bionomics’ pipeline of drug candidates is BNC164, a promising compound for autoimmune diseases. These are also the subject of ongoing discussions with potential partners.
In July, Bionomics struck a research deal with pharmaceutical giant Merck that may generate more than $US172 million ($A190.67 million) for Bionomics. Under the licensing deal, Bionomics will use its technology to discover and develop small molecules that may be used in the treatment of chronic pain in diseases such as diabetes, Alzheimer’s and shingles.
Osprey Medical, Inc (OSP, 70 cents)
Although medical device company Osprey Medical is listed in both Australia and the USA, its core technology was developed at the Baker IDI Heart and Diabetes Institute in Melbourne and funded by Australian venture capital. The company’s system, called CINCOR, treats contrast-induced nephropathy (CIN), a form of kidney injury caused by the X-ray-visible dye that cardiologists inject during common heart procedures, such as stenting and angioplasty. The dye is used as a contrast medium to help the doctors identify certain body parts and interpret the X-rays better.
Patients with normal kidney function don’t usually have a problem with the dye. But about 25% of all patients undergoing heart operations and stenting procedures have pre-existing kidney disease, and can incur problems ranging from reduced kidney function all the way to kidney shutdown and the risk of death. CINCOR is the first product that allows cardiologists to prevent dye from reaching the kidneys.
Osprey estimates about 400,000 patients, out of 2.2 million who undergo angioplasty and stenting procedures in the US and western Europe, are at risk of CIN because of pre-existing kidney disease and says the global market for its device is worth as much as $US800 million.
CINCOR is CE-marked for sale in the European Union (EU), but is not yet approved by the Food & Drug Administration (FDA) to be sold in the USA. The pathway to that for medical devices differs to that for a drug: first, Osprey must complete an investigational device exemption (IDE) that allows CINCOR to be used in a clinical study in order to collect safety and effectiveness data.
Then the company goes to premarket approval (PMA), the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices.
In March 2013, Osprey announced commencement of its US registration-directed IDE clinical study of the CINCOR system, a multi-nation trial called PRESERV, which will continue into 2014, as Osprey builds its case for FDA regulatory clearance for CINCOR, which it has told the ASX it expects towards the end of 2014. Once FDA clearance is granted, Osprey says, “large-scale commercialisation” will follow.
In the meantime, the company is also commercialising the CINAVERT system, an offshoot of the CINCOR technology that is used in patients undergoing an angiogram or diagnostic catheterisation procedure, where the dye volume usage is moderate and predictable. Osprey says CINAVERT gives it the potential to expand its CIN protection offerings to an additional one million patients a year.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
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